Watch Obama's coal rules to gauge his faith in green innovation

Watch Obama's coal rules to gauge his faith in green innovation

On Monday, President Obama will reveal once and for all whether, in his own words, he has "the courage to act before it's too late" to tackle climate change.

The president repeatedly has declared that he wants to make action on climate change a central plank of his second-term agenda and the past few months has seen a steady stream of announcements designed to boost America's green economy.

But next week will see the unveiling of the centerpiece of the Obama administration's climate agenda, as the president himself prepares to announce long-awaited new Environmental Protection Agency rules designed to curb emissions from power stations.

The so-called Carbon Pollution Standards have endured a six-year gestation, following the 2007 Supreme Court ruling that greenhouse gas emissions posed a threat to human health and as such could be regulated by the EPA under the Clean Air Act.

Obama used his first term to try to push through specific climate change legislation that would have enabled a national emissions trading scheme. When the proposals ran into fierce Republican opposition in Congress, he switched his approach to using executive orders and the EPA to try to deliver cuts in U.S. emissions.

The strategy already has seen Obama provide billions of dollars of funding for clean tech projects and push through emissions standards for new vehicles, but he is set to open a major new front in the White House's climate change push with the announcement of EPA emissions standards for all existing and new power plants.

Precise details of the standards have remained a closely guarded secret, but some aspects of the new rules are known. The new binding emissions limits initially will be set at a level that affects America's 600 coal-fired power stations, rather than its expanding fleet of gas-fired power stations, and as such has been widely characterized as a "war on coal" by the president's critics.

Dan Utech, special assistant to Obama on energy and climate issues, was quoted as saying that the new rules were "going to enable states to move forward in a way that works best for them with the energy resources they have." Consequently, experts are predicting that the rules will allow states such as California that already have emissions trading schemes in place to use existing cap-and-trade mechanisms to limit power plant emissions.

Other states may be allowed to introduce offset programs, whereby coal power generators fund renewable energy projects, while some may opt for simpler bans on new coal power plants that fail to meet minimum emissions standards.

Green businesses and NGOs are excited at the prospect of the new rules, which are expected to drive increased investment in clean energy, accelerate development of carbon capture and storage projects and curb the multi-billion dollar health impacts associated with unabated coal-fired power plants.

However, numerous questions about the new rules remain. Details have yet to be released on the scale of the emission reductions the new standards will require, the timetable for phasing in emission limits and the enforcement regime for the new rules.

"A 25 percent reduction with a 2005 baseline might be business as usual," Jason Grumet, president of the Bipartisan Policy Center, told The Wall Street Journal. "A 25 percent reduction with a 2015 baseline might make it impossible for some companies to operate."

Green groups remain concerned that the White House will opt for an emissions reduction target that is broadly in line with its non-binding goal of curbing U.S. greenhouse gas emissions by 17 percent against 2005 levels by 2020 — a target criticized as singularly unambitious, given the scale of the global emissions reductions required and the manner in which U.S. emissions have fallen sharply in recent years as a result of recession and the increased use of gas and renewable power.

Moreover, fears remain that the new standards will incorporate high levels of flexibility that may be designed to head off accusations that the Obama administration is forcing the closure of coal plants or deliberately pushing up energy bills, but also will result in the rules failing to deliver on promised emissions savings.

In addition, concerns remain that the rules, meant to be enacted next year, will face further delays as industry groups and Republican lawmakers line up with a series of legal actions and blocking tactics designed to neuter the regulations.

The regulations, as well as the Obama administration's wider climate change strategy, are expected to play a major part in the next mid-term and presidential elections. Republicans and carbon intensive industry groups are preparing to launch a major assault on the rules, while billionaire climate activist Tom Steyer said last week that he was willing to spend up to $100 million to attack climate sceptic candidates in key electoral battles in Colorado, Florida, Iowa, Michigan, Maine, New Hampshire and Pennsylvania.

Recent Yale polling suggest that 64 percent of voters think the government should limit emissions from power plants, while 61 percent say that developing clean energy should be a high or very high priority for the president and Congress. However, broad public support is likely to be tempered by heated allegations that the White House is taking steps that will damage the economic prospects of America's industrial heartlands.

Despite the many political and legal challenges the new rules likely will face, Obama appears increasingly committed to positioning the shift from dirty to clean energy as a central achievement of his second term. Consequently, policymakers, business leaders and investors around the world will be watching closely Monday to see whether the EPA's detailed proposals have lived up to Obama's promise that the agency would "put an end to the limitless dumping of carbon pollution from our power plants."

Ambitious new standards could have global implications, as they not only would deliver a major boost to U.S. clean energy investment, but would signal to other major economies ahead of next year's Paris summit that the U.S. was willing to introduce legally binding measures to curb emissions.

Announcing the new strategy last year, Obama said there was a compelling economic case for introducing emissions standards that would improve quality of life and drive innovation.

"What you'll hear from the special interests and their allies in Congress is that this will kill jobs and crush the economy, and basically end American free enterprise as we know it," he predicted.

"And the reason I know you'll hear those things is because that's what they said every time America sets clear rules and better standards for our air and our water and our children's health. And every time, they've been wrong. ...

"The problem with all these tired excuses for inaction is that it suggests a fundamental lack of faith in American business and American ingenuity. These critics seem to think that, when we ask our businesses to innovate and reduce pollution and lead, they can't or they won't do it. They'll just kind of give up and quit. But in America, we know that's not true."

Monday's announcement will reveal how much confidence Obama has in American business ingenuity and its ability, in his words, to take the old rules that "say we can't protect our environment and promote economic growth at the same time" and use "research and development and discovery to make the old rules obsolete."